Odey defends Brazil investment breaches as ‘a parking fine’
Hedge fund boss backs agriculture company penalised for environmental damage
Hedge fund manager Crispin Odey has come out in defence of a Brazilian agriculture company that has been fined for breaching rules about exploring and damaging tropical savannah, saying the penalties amount to “a parking fine”.
On Wednesday, the Financial Times reported that London-based Odey Asset Management had invested $170m in SLC Agricola, which has been fined close to $2.5m for violations such as planting soy in embargoed areas and “exploring” native forest, based on a report by campaign group Global Witness.
However, Mr Odey said in an interview with the FT that the Logemann family, whose members hold the positions of chairman and vice-chairman, were the “most trustworthy” of partners and that the fines, imposed over a 12-year period, were very small in comparison with SLC’s overall business.
“These people are not in the game of converting jungle into cotton farms,” said Mr Odey, one of Britain’s best-known hedge fund managers.
“This is not like BP getting done in the Gulf of Mexico,” he said, referring to the 2010 Deepwater Horizon disaster, which ultimately cost BP more than $60bn. Mr Odey added: “$2m is neither here nor there . . . It truly is a parking fine.” A similar picture would be found “if we looked at any company and found out what fines they had ever paid”, he said.
Global Witness estimated Odey received more than $2m in dividends in 2018, after building a 14 per cent stake in SLC. Odey has since cut back its investment to just under 10 per cent.
According to Mr Odey, SLC wrote to Global Witness to explain its actions after the campaign group contacted the hedge fund about its investment. Mr Odey said Global Witness is “not interested in the truth. They’re interested in basically chaining themselves to a railing, and the railing they’re chaining themselves to is your [the FT’s] railing.”
A spokesperson for Global Witness said it “stands by its reporting 100 per cent”, adding: “SLC Agricola’s track record of deforestation is undisputed and the environmental fines speak for themselves.
“Our report raised legitimate concerns about a UK investor pumping money into an environmentally damaging company at a time when the world faces a climate emergency.”
The fines were issued by Ibama, the Brazilian Institute of the Environment and Renewable Natural Resources. A former senior employee at Ibama said that some of the actions for which SLC Agricola had been penalised demonstrated a lack of regard for the work carried out by environmental agencies.
“There are some companies linked to the soy production chain with higher fines [than SLC Agricola] but it is not correct to simply disregard all of the judgments made by the agency,” the employee added.
SLC has overturned one of the fines and has appealed against the others, according to Ibama. SLC said last week that “it carries out administrative and judicial actions whenever its practices are questioned without plausive justification”, adding that it complies with all Brazilian laws and regulations.